According to the article, the measure could also include a Cabinet-level oversight board to oversee the plan: a kind of "car czar" that would write guidelines for a Big Three restructuring, and also be empowered to revoke the loans and send the companies into bankruptcy if they don't make progress on fundamental shifts in their business.

The Moody Economist suggests the cost of such a bailout could be as high as $100 billion, but that's still a fraction of what Congress awarded the banks, and this is an industry that will affect our nation's economy far beyond the Big Three manufacturers. 

About 700 dealerships, most of them selling cars from U.S. automakers, have shut their doors since the beginning of the year. The number is expected to hit 900 by year's end.
Last month, National Automobile Dealers Association Chairwoman Annette Sykora told the House Financial Services Committee only about 19,700 dealerships will still in business by the end of 2008, compared with 50,000 in the 1940s. According to an article at CNN.com, auto sales are at a 15-year low, which affects more than the Big Three automakers. Dealers are slashing personnel and expenses, and you don't have to be an economist to see how far this trickles down into everybody's pockets. The consequences of a total collapse are simply too great to allow.

Remember, the Big Three domestic manufacturers are just the beginning. Every piece and part on every car has to be sourced from somewhere, and the businesses that make the knobs, buttons, fuses, and wires for GM, Ford and Chrysler are also providing similar products to other manufacturers, such as Honda, Toyota, Hyundai, BMW, and Nissan. We're talking hundreds of suppliers making billions of bits for both domestic and international companies. Due to aggressive contract negotiations, most of these suppliers have little elasticity in their business model and are probably already on their own brink of disaster from the reduction in sales.  Should the Big 3 go, the suppliers fall, then ripple effect will severely impact the other automakers.

Why do you need your auto dealers to stay in business? Regardless of whether your local auto dealer sells cars from Ford, Chrysler, or General Motors, here are reasons why - no matter where you live -- you need them to stay in business:

1: They employ people in sales staff, finance department, maintenance, and administration. Their salaries suppport the local economy when they pay  their  rent, buy groceries in local markets, and buy gas in local gas stations.

2: Through Dealership profits, they routinely fund local schools, churches, and sports teams through charitable sponsorships.

3: Local papers and TV news are heavily underwritten by car dealers. Without them, local information will be harder to find. Many national companies are already struggling due to reductions in advertising. Case in point: Source Interlink (publisher of Motor Trend Magazine  and hundreds of other automotive titles) and Hearst  entered the holiday season by announcing layoffs of hundreds of employees. How will local papers survive on an even smaller scale?

4: The sales tax on each car they sell supports local schools and education. The reduction we are seeing in car sales right now is going to affect what our students learn in the next term. And not just our children, but students at state-funded colleges as well. According to a report by the National Center for Public Policy and Higher Education, the rising cost of college is already threatening to put higher education out of reach for many Americans. The likelihood of large tuition increases next year is especially worrying, says Patrick M. Callan, president of the center. "Most governors' budgets don't come out until January, but what we're seeing so far is Florida talking about a 15 percent increase, Washington State talking about a 20 percent increase, and California with a mixture of budget cuts and enrollment cuts," he said.

5. This reduction in income is likely to lead to increased taxes in other forms, as states struggle to make budgets.

California is already in trouble, according to an analysis of California Tax Revenue in September 2008 at creditbubblestocks.com. Compared to September 2007, General Fund revenue in September 2008, was down by $465 million (-4.4%). Corporate taxes were below estimate by $485 million (-21.0%), and personal income taxes were below last September by $26 million (-0.5%). Sales taxes were $71.7 million greater (3.5%) than last year. The total for the three largest taxes was below 2007 levels by $440 million (-4.4%).

I'm frightened by the many people who turn a blind eye and say things like "it's time for the American auto industry to disappear." I agree with the position stated at Consumer Reports, which essentially says we need to provide the domestic manufacturers a chance to reorganize into a more efficient structure, and require them to be held accountable to make the necessary changes to become more economically viable and energy efficient.

But I strongly believe we must also stop pointing fingers at the executives and blaming management, and point to the UAW to accept some serious compromises on salaries and benefits in order to enable these companies to survive.

Otherwise it won't matter where any of us fit on the automotive totem pole, we are all going to be out of work.

By Brandy Schaffels
AskPatty Editor and supporter of the Domestic Automotive Industry